CPA FAR Practice Questions - AICPA CPA Exam - Financial Accounting & Reporting (FAR) Exam

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On January 1, Year 1, Lion Co. entered an operating lease with a 5-year term and annual payments of $10,000 due at year-end. The implicit rate is 6%, and the present value of the lease payments is $42,124. What is the right-of-use (ROU) asset recorded at lease commencement?

$$42,124 $$50,000 $$10,000 $$45,000

Correct Answer:

$$42,124

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